Massachusetts State Senate unanimously approves bill requiring “Market-Based Compliance Mechanisms” to reduce carbon emissions

The Massachusetts Statehouse

Last night, the Massachusetts Senate unanimously passed a wide-ranging bill, An Act to Promote a Clean Energy Future, which would compel the governor to establish “market-based compliance mechanisms” to reduce greenhouse-gas emissions from the transportation sector; the commercial, industrial, and institutional sectors; and the residential building sector. The legislation also calls for the development of 5 gigawatts of offshore wind by 2035, the most ambitious target in the country, and would mandate a statewide energy storage target of 2 gigawatts by 2030, which is on par with New Jersey’s nation-leading storage mandate, established earlier this spring.  Massachusetts State Senator Marc Pacheco, who serves as Co-Chair of the CSG/ERC Energy & Environment Committee, was a key sponsor of the bill (S2545). Click here to read a section-by-section summary of the bill.

The Senate’s approval is historic for a few reasons:

• First, it represents the first time that a state legislative body outside of California has approved legislation that would compel the executive branch to create a mechanism to reduce carbon emissions economy-wide;
• Second, the legislation does not explicitly call for a carbon fee or for cap-and-trade; it leaves it up to the executive branch to devise the approach that will be implemented;
• Third, the legislation would enable this market-based compliance mechanism to form “part of a coordinated regional effort with other states or Canadian Provinces to implement, expand or join any other market-based compliance mechanisms”; and
• Fourth, the legislation received unanimous, bipartisan support.

“The Senate’s unanimous passage of this historic bill shows that we understand the urgency of climate change, and that we are willing to work together in a bipartisan fashion to make Massachusetts a clean-energy leader,” said Senator Pacheco, who is Senate President Pro Tempore and founding chair of the Senate Committee on Global Warming and Climate Change. “The cost of inaction is always greater than the cost of acting. This legislation offers climate solutions, and will accelerate the growth of cutting-edge technologies that are hastening the shift to a low-carbon economy.”

The legislation includes several other key provisions, including:

• Stringent interim carbon-reduction goals for 2030 and 2040;
• A 5 GW offshore wind target by 2035, the most aggressive target in the nation;
• A 2 GW battery storage target by 2030, on par with New Jersey’s nation-leading storage mandate;
• An increase in the rate of growth of the state’s RPS, to 3% a year from the current 1%;
• The elimination of the net-metering cap for solar;
• Promotion of solar incentive programs for low-income and environmental-justice communities;
• A requirement that the state’s pension fund divest from thermal coal holdings;
• A prohibition on electric and gas companies from passing the costs of building or expanding gas pipelines onto customers;
• A requirement that state regulators issue regulations compelling all gas companies to report to the department, in a uniform manner, lost and unaccounted-for gas for each year.

Additionally, the legislation would mandate that:

• The state DEP track the source and carbon intensity of all transportation fuels;
• State transportation officials develop a program to promote private electric vehicle adoption in the commonwealth, with a goal of 25% ownership by 2028; and that
• 100% of the state’s fleet purchased after 2026 be zero-emission vehicles.

The legislation now heads to the House for consideration.